Emini Futures Trading Blog
Members' Area
This area does not yet contain any content.
Members Area
Live Emini Training Room
Christian Financial Radio Network
Emini Broadcast Listen Live

 

Live Market Commentary


Every Trading Day 12-2pm Eastern

To view our charts and participate
in the live discussion

Click Here

 

 

 

Compatible Trading Platforms

 

Christian Financial Radio Network BBB Business Review

 

 

 

What happens in your E-Mini Live Trading Room?

For traders seeking hands-on instruction in a virtual classroom, we offer the CFRN Live emini trading room. CFRN wraps all of its proprietary trading systems, indicators, and methodology into this unique educational environment.

live market commentary, real-time application of the CFRN Proprietary Indicators, and trade signals in real-time.
Ask questions and learn the most important trading lesson of all: WHEN, HOW, and WHY you should get in or out of a trade.

 

This show is so good because it not only talks about the markets , which we all are enthralled with, but also about finding out about ourselves and how it relates not only to our trading, but maybe even more important about how we see ouselves in the world we live in and how from the knowledge we take from this show can make ourselves a better human being in our life here on earth--I'll say it one more time"MAN I LOVE THIS SHOW"-thanks guys

- R.H. Canada

More testimonials ...



Follow Us
« 22 Business Building Tips For Emini Futures Traders | Main | Quadruple Witching »
Monday
Sep242012

Hidden Divergence - The Silent Thriller

(QQQ)(DIA)(SPY)(GLD)(FB)

The ability to spot divergence in the Emini Futures gives traders a distinct advantage.

 

How To Trade Hidden Divergence - The Silent Thriller

 

Typically when you hear someone speak of divergence in a particular market, they tend to be looking for a reversal or change of trend. In a bullish market they anticipate prices heading lower and in a bearish trend they anticipate prices heading higher.

Ordinary Divergence is easy enough to spot once you train your eyes. In a bull trend price will make a lower low while indicator you are using makes a higher low. In a bear trend, prices will make a higher high while the indicator will make a lower high. That is ordinary divergence and is used as early warning that the momentum in the current direction is waning or has come to an end. Popular examples of the momentum indicators used are the RSI or Relative Strength Index, the Stochastics Oscillator and many others. Of the two mentioned both of these have a range of 0-100. While they are commonly used and readily available in most trading platforms, we have developed several proprietary CFRN Tools we believe do a vastly superior job of identifying divergence more accurately and on a more consistent basis. Make no mistake, understanding ordinary divergence is a tremendous trading technique.

Hidden Divergence is a bit different and in my opinion an even more powerful tool for trading Emini Futures. Unlike ordinary divergence where we are looking for the momentum of a trend to reverse, with hidden divergence we are looking for a signal that the trend will continue. Newton's First Law of Motion tells us that an object in motion tends to remain in motion, and an object at rest tends to remain at rest.

About 1000 AD, Ibn Sina came up with the idea that an object moving in a vacuum would just keep moving forever without slowing down. In the 1700s, Isaac Newton figured out a way to prove this was true using mathematics. If you were out in space and you gave a rock a push, its momentum would keep the rock moving at the same speed in the same direction until it bumped into something. On the other hand, if you put a rock in space and left it there not moving, its inertia would keep it right there, hanging in space, forever (or until something bumped into it or it came under gravitational or magnetic pull).

Unlike Space, on Earth objects slow down due to friction and/or gravity. In the markets, trends slow down in part to the 2nd Law of Thermodynamics one could argue, but for the more readily apparent reason, we will simply narrow our focus to the opposing market forces. Outside the 2nd Law, a unique thing about a momentum move in the markets is that prior to slowing down and ultimately reversing direction, it will quite often increase in velocity towards the end of its move.

The ability to spot and trade hidden divergence is such a powerful tool because it enables you to potentially capture the most forceful part of a trend in a comparitively short period of time. We discussed that with ordinary divergence price will make a lower low in a bull trend but the momentum indicator you are using makes a higher low. With Hidden Divergence the opposite is true. In a bull trend price will make a higher low and the indicator will make a lower low. This is our signal that what we are seeing is simply a pullback in price and not a reversal. In a bear trend, price will make lower high and the indicator makes a higher high. Picture if you can, the train backing into the station so you can still climb aboard.

Trading Hidden Divergence gives us the opportunity to profit by taking advantage of a pullback in an existing trend. Remember, the path of least resistance is when you have the wind (momentum) at your back. The higher probability is that the market will continue doing what it is already doing. (until it doesn't)

Here are examples of Hidden Divergence:

 

 

 

 

 

To see Live Charts and Live Trades based on Hidden Divergence - The Silent Thriller in real time, visit our Live Emini Trading Room. Take a 1 Week No Obligation Free Trial!

Many experienced traders contend that of the two types of divergence, the ‘hidden’ variety is a higher probability trading setup. This is based on the very simple fact that hidden divergence as opposed to regular divergence is a trend continuation indicator. Regular divergence is more of a reversal indicator. 

We've all heard "The Trend Is Your Friend" more times than we can remember and there is certainly truth to the concept that trading with the trend is considered by many successful traders to be a higher probability trade than trying to pick tops and bottoms. Learning to spot it and then "how to trade it" is exactly what you'll learn from our Lead Trader/Trainer/Instructor Michael in our Live Trading Room.Along with teaching you the concept and "how to" of trading hidden divergence, we will also allow you to use our CFRN Proprietary Tools for 1 Full Week absolutely free. No CC required. To set your feet on the path that leads to high probability disciplined trading, Apply Today!

 


S&P 500 Emini Futures

 

 

SP 500 Emini Futures(ES) S&P 500 Emini Futures

 

 

November Soybeans


SUNDAY, SEPTEMBER 23, 2012

November Soybeans Complete Move to $16.00

Update - Globex Open: 

Soybeans break target to $15.93

 

 

Emini Podcast for Monday 09/24/12

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>